“In the three months since I have stepped in as the Interim CEO, we have
worked tirelessly to ensure that we extract synergies related to the
Actavis Generics transaction, drive additional efficiencies throughout
the organization, support cash generation, pay down debt, deliver on the
promise of the specialty pipeline and execute key generic launches,”
stated Dr. Yitzhak Peterburg, Interim Chief Executive Officer. “We are
pleased that the transaction synergies and additional cost reductions
are on track, and we now expect to realize cumulative net synergies and
cost reduction of approximately $1.5 billion by the end of 2017, an
increase of $200 million compared to our previous guidance. Notably, we
have reduced our gross debt by $1.2 billion in the quarter. We are also
pursuing the sale of certain non-core assets, including our global
Women’s Health business and our Oncology and Pain business in Europe, to
pay down debt. In Specialty, we have received several important
approvals, including the recent approval and launch of AUSTEDO™ for
Huntington's disease.”

Dr. Peterburg continued, “Looking forward to the rest of 2017, we are
reaffirming our full-year outlook. While we have several challenges
facing us, including the U.S Generics market dynamics and greater
instability in the Venezuela market, we are very confident that the
global business we have built will allow Teva to thrive in the future as
the leader in the generics industry. I would like to thank the employees
of Teva for their hard work and dedication to continuing to deliver on
our commitment to patients around the world.”

Dr. Peterburg concluded, “I would also like to thank Eyal Desheh, whose
planned departure we announced a few weeks ago, for his contributions to
Teva’s growth and success throughout his tenure. We are pleased to
announce that Michael McClellan will serve as the Interim CFO, effective
July 1, 2017. For the last two years, Mike has served as the CFO of our
Global Specialty Medicines division. Prior to joining Teva, Mike was the
U.S. CFO at Sanofi, where his career spanned over 20 years in roles of
increasing responsibility in global finance and healthcare. I am
confident Mike will be an excellent addition to our team. Eyal and Mike
will work closely together to ensure a smooth transition. As we have
stated previously, we expect our new CEO to have a significant role in
identifying a permanent successor.”

First Quarter 2017 Results

Revenues in the first quarter of 2017 were $5.6 billion, up 17%
compared to the first quarter of 2016, primarily due to the inclusion of
the Actavis Generics business, following the closing of the acquisition
on August 2, 2016. Excluding the impact of foreign exchange
fluctuations, revenues increased 22%.

Exchange rate differences between the first quarter of 2017 and
the first quarter of 2016 reduced revenues by $254 million, GAAP
operating income by $78 million and non-GAAP operating income by $81
million. Changes in exchange rates used for the Venezuelan bolivar, as
well as inflation-driven price increases in Venezuela, decreased
revenues by $217 million, GAAP operating income by $71 million and
non-GAAP operating income by $67 million, compared to results in the
first quarter of 2016. In light of the economic conditions in Venezuela,
the changes in revenues and operating profit in Venezuela have been
excluded from any discussion of currency effects.

GAAP gross profit was $2.8 billion in the first quarter of 2017,
up 1% compared to the first quarter of 2016. GAAP gross profit margin
was 50.1% in the first quarter of 2017, compared to 58.0% in the first
quarter of 2016. Non-GAAP gross profit was $3.2 billion in the
first quarter of 2017, up 6% from the first quarter of 2016. Non-GAAP gross
profit margin was 56.8% in the first quarter of 2017, compared to
62.7% in the first quarter of 2016. The decrease in gross profit margin,
on both a GAAP and a non-GAAP basis, was the result of the addition of
the low-margin Anda distribution business, as well as lower margins in
both the generic and specialty medicines businesses.

Research and Development (R&D) expenses for the first quarter
of 2017 amounted to $457 million, up 17% compared to the first quarter
of 2016, mainly due to the inclusion of R&D expenses for the Actavis
Generics business. R&D expenses excluding equity compensation expenses
and purchase of in-process R&D in the first quarter of 2017 were $446
million, or 7.9% of quarterly revenues, compared to $375 million, or
7.8%, in the first quarter of 2016. R&D expenses related to our generic
medicines segment were $191 million, an increase of 48% compared to $129
million in the first quarter of 2016, mainly due to the inclusion of R&D
expenses for the Actavis Generics business. R&D expenses related to our
specialty medicines segment were $255 million, an increase of 7%
compared to $239 million in the first quarter of 2016, mainly due to
increased expenses for the development of late-stage migraine
(TEV-48125, fremanezumab) and pain (fasinumab) products.

Selling and Marketing (S&M) expenses in the first quarter of
2017 amounted to $971 million, an increase of 16% compared to the first
quarter of 2016. S&M expenses excluding amortization of purchased
intangible assets and equity compensation expenses were $907 million, or
16.1% of revenues, in the first quarter of 2017, compared to $821
million, or 17.1% of revenues, in the first quarter of 2016. S&M
expenses related to our generic medicines segment were $400 million, an
increase of 16% compared to $345 million in the first quarter of 2016,
mainly due to the inclusion of the S&M expenses of the Actavis Generics
business and the launch of our business venture in Japan in the second
quarter of 2016. S&M expenses related to our specialty medicines segment
were $461 million, up 1% compared to $457 million in the first quarter
of 2016.

General and Administrative (G&A) expenses in the first
quarter of 2017 amounted to $236 million, compared to $304 million in
the first quarter of 2016. G&A expenses excluding equity compensation
expenses were $222 million in the first quarter of 2017, or 3.9% of
quarterly revenues, compared to $294 million, or 6.1% in the first
quarter of 2016. The lower G&A expenses in the first quarter of 2017
mainly reflect income related to a legal recovery in Canada and income
from milestone payments from the AttenukineTM out-license,
partially offset by expenses related to the Actavis Generics business.

GAAP operating income in the first quarter of 2017 was $0.9
billion, down 23% compared to $1.2 billion in the first quarter of 2016.
GAAP operating margin was 15.9% in the first quarter of 2017
compared to 24.2% in the first quarter of 2016. Non-GAAP operating
income in the first quarter of 2017 was $1.6 billion, up 6% compared
to $1.5 billion in the first quarter of 2016. Non-GAAP operating
margin was 28.8% in the first quarter of 2017 compared to 31.7% in
the first quarter of 2016.

EBITDA (non-GAAP operating income - which excludes amortization
and certain other items - as well as excluding depreciation expenses)
was $1.8 billion in the first quarter of 2017, up 9% compared to $1.6
billion in the first quarter of 2016.

GAAP financial expenses for the first quarter of 2017 were $207
million, compared to $298 million in the first quarter of 2016. Non-GAAP
financial expenses were $235 million in the first quarter of 2017,
compared to $52 million in the first quarter of 2016, mainly due to
higher interest expenses related to the debt raised to finance the
acquisition of Actavis Generics.

GAAP income taxes for the first quarter of 2017 amounted to $54
million, or 8% on pre-tax income of $688 million. In the first quarter
of 2016, GAAP income taxes amounted to $228 million, or 26% on pre-tax
income of $867 million. Non-GAAP income taxes for the first
quarter of 2017 amounted to $240 million on pre-tax non-GAAP income of
$1.4 billion, for a quarterly tax rate of 17%. Non-GAAP income taxes in
the first quarter of 2016 amounted to $302 million on pre-tax non-GAAP
income of $1.5 billion, for a quarterly tax rate of 21%.

GAAP net income attributable to ordinary shareholders and GAAP
diluted EPS were $580 million and $0.57, respectively, in the first
quarter of 2017, compared to $570 million and $0.62, respectively, in
the first quarter of 2016. Non-GAAP net income attributable to
ordinary shareholders for calculating diluted EPS and non-GAAP
diluted EPS were $1.1 billion and $1.06, respectively, in the first
quarter of 2017, compared to $1.2 billion and $1.20, respectively, in
the first quarter of 2016.

For the first quarter of 2017, the weighted average outstanding
shares for the fully diluted earnings per share calculation on both
a GAAP and a non-GAAP basis was 1,017 million. The weighted average
diluted shares outstanding used for the fully diluted share calculation
for the first quarter of 2016 was 920 million shares on a GAAP basis and
979 million on a non-GAAP basis. The increase in the number of shares
resulted mainly from the issuance of shares to Allergan in August 2016
in connection with the closing of the Actavis Generics acquisition. For
the three months ended March 31, 2017, no account was taken of the
potential dilution resulting from the conversion of the mandatory
convertible preferred shares amounting to 59 million weighted average
shares, since they had an anti-dilutive effect on earnings per share.

As of March 31, 2017, the fully diluted share count for calculating
Teva's market capitalization was approximately 1,082 million shares.

Non-GAAP information: Net non-GAAP adjustments in the first
quarter of 2017 were $499 million. Non-GAAP net income and non-GAAP EPS
for the quarter were adjusted to exclude the following items:

Amortization of purchased intangible assets totaling $320 million, of
which $267 million is included in cost of goods sold and the remaining
$53 million in selling and marketing expenses;

Restructuring expenses of $130 million, mainly related to the
integration of Actavis Generics and other efficiency measures;

A capital loss from currency translation of $52 million, as a result
of the reclassification of currency translation adjustments from
accumulated other comprehensive income to the statements of income,
related to the divestiture of certain assets and operations of Actavis
Generics in the U.K. and Ireland;

Acquisition and related expenses including contingent consideration of
$44 million;

Equity compensation expenses of $36 million;

Costs related to regulatory actions taken in facilities of $34 million;

Legal settlements and loss contingencies of $20 million;

Impairment of long-lived assets of $11 million;

Other non-GAAP items of $15 million;

Financial income of $28 million;

Minority interest adjustment of negative $13 million; and

Corresponding tax benefit of $186 million.

Teva believes that excluding such items facilitates investors'
understanding of its business. See the attached tables for a
reconciliation of the GAAP results to the adjusted non-GAAP figures.

Cash flow from operations generated during the first quarter of
2017 was $0.5 billion, compared to $1.4 billion in the first quarter of
2016. The decrease was mainly due to higher payments for legal
settlements of $0.6 billion, primarily the FCPA settlement with the SEC
and DOJ and payments related to the ciprofloxacin settlement, as well as
$0.3 billion related to the final settlement of our forward starting
interest rate swaps and treasury lock agreements that matured during the
first half of 2016. Free cash flow, excluding net capital expenditures,
was $0.3 billion, compared to $1.2 billion in the first quarter of 2016.

Segment Results for the First Quarter 2017

Beginning in the fourth quarter of 2016, our OTC business, conducted
primarily through PGT, as well as our API manufacturing business, are
included in our generic medicines segment, which includes chemical and
therapeutic equivalents of originator medicines in a variety of dosage
forms.

All data presented has been conformed to the new segment structure.

Generic Medicines Segment

Three Months Ended March 31,

2017

2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

3,058

100.0%

$

2,458

100.0%

Gross profit

1,370

44.8%

1,123

45.7%

R&D expenses

191

6.2%

129

5.3%

S&M expenses

400

13.1%

345

14.0%

Segment profit*

$

779

25.5%

$

649

26.4%

* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.

Generic Medicines Revenues

Generic medicines revenues in the first quarter of 2017 were $3.1
billion, an increase of 24% compared to the first quarter of 2016,
reflecting the inclusion of the Actavis Generics business.

Generic revenues consisted of:

U.S. revenues of $1.4 billion, an increase of 41% compared to the
first quarter of 2016, mainly due to the inclusion of Actavis Generics.

European revenues of $988 million, an increase of 25%, or 31% in local
currency terms, compared to the first quarter of 2016, mainly due to
the inclusion of Actavis Generics.

ROW revenues of $689 million, in line with results in the first
quarter of 2016, but an increase of 27% in local currency terms. The
increase in local currency terms was mainly due to the inclusion of
the results of our Japanese business venture with Takeda, which
commenced operations in April 2016 as well as the inclusion of Actavis
Generics.

OTC revenues (which are included in the market revenues above) were
$264 million, a decrease of 10% compared to $292 million in the first
quarter of 2016. In local currency terms, revenues increased 25%.
PGT’s in-market sales were $318 million in the first quarter of 2017,
compared to $411 million the first quarter of 2016.

API sales to third parties (which are included in the market revenues
above) were $197 million, in line with results in the first quarter of
2016.

Generic medicines revenues comprised 54% of our total revenues in the
quarter, compared to 51% in the first quarter of 2016.

Generic Medicines Gross Profit

Gross profit of our generic medicines segment in the first quarter of
2017 was $1.4 billion, an increase of 22% compared to $1.1 billion in
the first quarter of 2016. The higher gross profit was mainly a result
of the inclusion of Actavis Generics and our business venture with
Takeda in Japan, both of which impacted the current quarter but not the
first quarter of 2016.

Gross profit margin for our generic medicines segment in the first
quarter of 2017 decreased to 44.8% from 45.7% in the first quarter of
2016.

Generic Medicines Profit

Our generic medicines segment generated profit of $779 million in the
first quarter of 2017, an increase of 20% compared to the first quarter
of 2016. Generic medicines profitability as a percentage of generic
medicines revenues was 25.5% in the first quarter of 2017, down from
26.4% in the first quarter of 2016.

Specialty Medicines Segment

Three Months Ended March 31,

2017

2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,020

100.0%

$

2,152

100.0%

Gross profit

1,754

86.8%

1,871

86.9%

R&D expenses

255

12.6%

239

11.1%

S&M expenses

461

22.8%

457

21.2%

Segment profit*

$

1,038

51.4%

$

1,175

54.6%

* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.

Specialty Medicines Revenues

Specialty medicines revenues in the first quarter of 2017 were $2.0
billion, down 6% compared to the first quarter of 2016. U.S. specialty
medicines revenues were $1.5 billion, down 11% compared to the first
quarter of 2016. European specialty medicines revenues were $438
million, an increase of 11%, or 17% in local currency terms, compared to
the first quarter of 2016. ROW specialty revenues were $90 million, up
11%, or 9% in local currency terms, compared to the first quarter of
2016.

Specialty medicines revenues comprised 36% of our total revenues in the
quarter, compared to 45% in the first quarter of 2016.

The decrease in specialty medicines revenues compared to the first
quarter of 2016 was primarily due to lower sales of our CNS and
respiratory products, partially offset by a payment of $75 million which
we received in connection with our agreement to sell our royalties and
other rights in Ninlaro® (ixazomib) to a subsidiary of Takeda.

The following table presents revenues by therapeutic area and key
products for our specialty medicines segment for the three months ended
March 31, 2017 and 2016:

Three Months Ended

March 31,

Percentage Change

2017

2016

2017 - 2016

U.S. $ in millions

CNS

$

1,138

$

1,323

(14%)

Copaxone®

970

1,006

(4%)

Azilect®

60

113

(47%)

Nuvigil®

17

103

(83%)

Respiratory

304

366

(17%)

ProAir®

121

173

(30%)

QVAR®

98

134

(27%)

Oncology

270

268

1%

Treanda® and Bendeka®

157

155

1%

Women's Health

124

110

13%

Other Specialty*

184

85

116%

Total Specialty Medicines

$

2,020

$

2,152

(6%)

* Includes a $75 million payment related to the Ninlaro®
transaction in the first quarter of 2017.

Global revenues of Copaxone®(20 mg/mL and 40
mg/mL), the leading multiple sclerosis therapy in the U.S. and globally,
were $970 million in the first quarter of 2017, a decrease of 4%
compared to the first quarter of 2016.

Copaxone® revenues in the United States, were $782 million, a
decrease of 5% compared to the first quarter of 2016, mainly due to
lower volumes of Copaxone® 20 mg/mL, partially offset by a
price increase of 7.9% for both Copaxone® products in January
2017. At the end of the first quarter of 2017, according to March 2017
IMS data, our U.S. market shares for the Copaxone® products
in terms of new and total prescriptions were 25.4% and 28.4%,
respectively. Copaxone® 40 mg/mL accounted for over 85% of
total Copaxone® prescriptions in the U.S.

Copaxone® revenues outside the United States were $188
million, an increase of 2%, or 5% in local currency terms, compared to
the first quarter of 2016 mainly due to higher volumes. Over 70% of the
total European Copaxone® prescriptions are now filled with
the 40 mg/mL version.

Our global Azilect® revenues were $60 million, a
decrease of 47% compared to the first quarter of 2016 following the
introduction of generic competition to Azilect® in the United
States in 2017.

Revenues of our respiratory products were $304 million, down 17%
compared to results in the first quarter of 2016. ProAir®
revenues in the first quarter of 2017 were $121 million, down 30%
compared to the first quarter of 2016, due to lower volumes mainly from
wholesaler and retailer inventory reductions and net pricing effects. QVAR®
global revenues were $98 million in the first quarter of 2017, down 27%
compared to the first quarter of 2016, primarily due to net pricing
effects and wholesaler and retailer inventory reductions in the United
States.

Revenues of our oncology products were $270 million in the first
quarter of 2017, up 1% compared to the first quarter of 2016. Combined
revenues of Treanda® and Bendeka®
were $157 million, up 1% compared to the first quarter of 2016.

Specialty Medicines Gross Profit

Gross profit of our specialty medicines segment was $1.8 billion, a
decrease of $117 million compared to the first quarter of 2016. Gross
profit margin for our specialty medicines segment in the first quarter
of 2017 was 86.8%, compared to 86.9% in the first quarter of 2016.

Specialty Medicines Profit

Our specialty medicines segment profit was $1.0 billion in the first
quarter of 2017, down 12% compared to the first quarter of 2016.

Specialty medicines profit as a percentage of segment revenues was 51.4%
in the first quarter of 2017, down from 54.6% in the first quarter of
2016.

The following tables present details of our multiple sclerosis franchise
and of our other specialty medicines for the three months ended March
31, 2017 and 2016:

Multiple Sclerosis

Three months ended March 31,

2017

2016

U.S.$ in millions / % of MS Revenues

Revenues

$

970

100.0%

$

1,006

100.0%

Gross profit

888

91.5%

919

91.4%

R&D expenses

22

2.3%

25

2.5%

S&M expenses

124

12.7%

89

8.9%

MS profit

$

742

76.5%

$

805

80.0%

Other Specialty

Three months ended March 31,

2017

2016

U.S.$ in millions / % of Other Specialty Revenues

Revenues

$

1,050

100.0%

$

1,146

100.0%

Gross profit

866

82.5%

952

83.1%

R&D expenses

233

22.2%

214

18.7%

S&M expenses

337

32.1%

368

32.1%

Other Specialty profit

$

296

28.2%

$

370

32.3%

Other Activities

Other revenues (primarily sales of third-party products for which
we act as distributor, mostly in the United States via Anda, contract
manufacturing services related to products divested in connection with
the Actavis Generics acquisition and other miscellaneous items) were
$552 million in the first quarter of 2017, compared to $200 million, in
the first quarter of 2016. The increase was mainly related to the
inclusion of Anda's revenues beginning in the fourth quarter of 2016.

Revenues from these other activities comprised 10% of our total revenues
in the quarter, compared to 4% in the first quarter of 2016.

Dividends

On May 10, 2017, the Board of Directors declared a cash dividend of
$0.34 per ordinary share for the first quarter of 2017. For holders of
our ordinary shares that are traded on the Tel Aviv Stock Exchange, the
dividend will be converted into new Israeli shekels based on the
official exchange rate as of May 11, 2017. The record date will be June
5, 2017, and the payment date will be June 22, 2017. Tax will be
withheld at a rate of 15%.

On May 10, 2017, the Board of Directors also declared a cash dividend of
$17.50 per Mandatory Convertible Preferred Share for the first quarter
of 2017. The record date will be June 1, 2017 and the payment date will
be June 15, 2017. Tax will be withheld at a rate of 15%.

Conference Call

Teva will host a conference call and live webcast along with a slide
presentation on Thursday, May 11, 2017 at 8:00 a.m. ET. to discuss its
first quarter 2017 results and overall business environment. A question
& answer session will follow.

In order to participate, please dial the following numbers (at least 10
minutes before the scheduled start time): United States 1-866-869-2321;
Canada 1-866-766-8269 or International +44(0) 203 0095710; passcode:
97789997. For a list of other international toll-free numbers, click here.

A live webcast of the call will also be available on Teva's website at: www.ir.tevapharm.com.
Please log in at least 10 minutes prior to the conference call in order
to download the applicable audio software.

Following the conclusion of the call, a replay of the webcast will be
available within 24 hours on the Company's website. The replay can also
be accessed until June 11, 2017, 9:00 a.m. ET by calling United States
1-866-247-4222; Canada 1-866-878-9237 or International +44(0)
1452550000; passcode: 97789997.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a leading
global pharmaceutical company that delivers high-quality,
patient-centric healthcare solutions used by approximately 200 million
patients in 100 markets every day. Headquartered in Israel, Teva is the
world’s largest generic medicines producer, leveraging its portfolio of
more than 1,800 molecules to produce a wide range of generic products in
nearly every therapeutic area. In specialty medicines, Teva has the
world-leading innovative treatment for multiple sclerosis as well as
late-stage development programs for other disorders of the central
nervous system, including movement disorders, migraine, pain and
neurodegenerative conditions, as well as a broad portfolio of
respiratory products. Teva is leveraging its generics and specialty
capabilities in order to seek new ways of addressing unmet patient needs
by combining drug development with devices, services and technologies.
Teva's net revenues in 2016 were $21.9 billion. For more information,
visit www.tevapharm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which
are based on management’s current beliefs and expectations and are
subject to substantial risks and uncertainties, both known and unknown,
that could cause our future results, performance or achievements to
differ significantly from that expressed or implied by such
forward-looking statements. Important factors that could cause or
contribute to such differences include risks relating to:

our generics medicines business, including: that we are
substantially more dependent on this business, with its significant
attendant risks, following our acquisition of Allergan plc’s worldwide
generic pharmaceuticals business (“Actavis Generics”); our ability to
realize the anticipated benefits of the acquisition (and any delay in
realizing those benefits) or difficulties in integrating Actavis
Generics; the increase in the number of competitors targeting generic
opportunities and seeking U.S. market exclusivity for generic versions
of significant products; price erosion relating to our generic
products, both from competing products and as a result of increased
governmental pricing pressures; and our ability to take advantage of
high-value biosimilar opportunities;

our substantially increased indebtedness and significantly
decreased cash on hand, which may limit our ability to incur
additional indebtedness, engage in additional transactions or make new
investments, and may result in a downgrade of our credit ratings;

our business and operations in general, including: uncertainties
relating to our recent senior management changes; our ability to
develop and commercialize additional pharmaceutical products;
manufacturing or quality control problems, which may damage our
reputation for quality production and require costly remediation;
interruptions in our supply chain; disruptions of our or third party
information technology systems or breaches of our data security; the
failure to recruit or retain key personnel, including those who joined
us as part of the Actavis Generics acquisition; the restructuring of
our manufacturing network, including potential related labor unrest;
the impact of continuing consolidation of our distributors and
customers; variations in patent laws that may adversely affect our
ability to manufacture our products; adverse effects of political or
economic instability, major hostilities or terrorism on our
significant worldwide operations; and our ability to successfully bid
for suitable acquisition targets or licensing opportunities, or to
consummate and integrate acquisitions;

compliance, regulatory and litigation matters, including: costs and
delays resulting from the extensive governmental regulation to which
we are subject; the effects of reforms in healthcare regulation and
reductions in pharmaceutical pricing, reimbursement and coverage;
potential additional adverse consequences following our resolution
with the U.S. government of our FCPA investigation; governmental
investigations into sales and marketing practices; potential liability
for sales of generic products prior to a final resolution of
outstanding patent litigation; product liability claims; increased
government scrutiny of our patent settlement agreements; failure to
comply with complex Medicare and Medicaid reporting and payment
obligations; and environmental risks;

other financial and economic risks, including: our exposure to
currency fluctuations and restrictions as well as credit risks; the
significant increase in our intangible assets, which may result in
additional substantial impairment charges; potentially significant
increases in tax liabilities; and the effect on our overall effective
tax rate of the termination or expiration of governmental programs or
tax benefits, or of a change in our business;

and other factors discussed in our Annual Report on Form 20-F for the
year ended December 31, 2016 (“Annual Report”), including in the section
captioned “Risk Factors,” and in our other filings with the U.S.
Securities and Exchange Commission, which are available at www.sec.gov
and www.tevapharm.com.
Forward-looking statements speak only as of the date on which they are
made, and we assume no obligation to update or revise any
forward-looking statements or other information contained herein,
whether as a result of new information, future events or otherwise. You
are cautioned not to put undue reliance on these forward-looking
statements.

Consolidated Statements of Income

(Unaudited, U.S. dollars in millions, except
share and per share data)

Three months ended

March 31,

2017

2016

Net revenues

5,630

4,810

Cost of sales

2,811

2,019

Gross profit

2,819

2,791

Research and development expenses

457

389

Selling and marketing expenses

971

839

General and administrative expenses

236

304

Impairments, restructuring and others

240

119

Legal settlements and loss contingencies

20

(25)

Operating income

895

1,165

Financial expenses – net

207

298

Income before income taxes

688

867

Income taxes

54

228

Share in (profits) losses of associated companies – net

(7)

6

Net income

641

633

Net loss attributable to non-controlling interests

(4)

(3)

Net income attributable to Teva

645

636

Dividends on preferred shares

65

66

Net income attributable to ordinary shareholders

580

570

Earnings per share attributable to ordinary shareholders:

Basic ($)

0.57

0.62

Diluted ($)

0.57

0.62

Weighted average number of shares (in millions):

Basic

1,016

913

Diluted

1,017

920

Non-GAAP net income attributable to ordinary shareholders:*

1,079

1,106

Non-GAAP net income attributable to ordinary shareholders for
diluted earnings per share:**

1,079

1,172

Non-GAAP earnings per share attributable to ordinary
shareholders:*

Basic ($)

1.06

1.21

Diluted ($)**

1.06

1.20

Non-GAAP average number of shares (in millions):

Basic

1,016

913

Diluted

1,017

979

* See reconciliation attached.

**Dividends on the mandatory convertible preferred shares of $66
million for the three months ended March 31, 2016 are added back to
non-GAAP net income attributable to ordinary shareholders, since
such preferred shares had a dilutive effect on non-GAAP earnings per
share.

Condensed Consolidated Balance Sheets

(U.S. dollars in millions)

(Unaudited)

March 31,

December 31,

2017

2016

ASSETS

Current assets:

Cash and cash equivalents

900

988

Trade receivables

7,264

7,523

Inventories

4,999

4,954

Prepaid expenses

960

1,362

Other current assets

669

1,293

Assets held for sale

43

841

Total current assets

14,835

16,961

Deferred income taxes

747

725

Other non-current assets

1,319

1,235

Property, plant and equipment, net

8,160

8,073

Identifiable intangible assets, net

21,189

21,487

Goodwill

45,026

44,409

Total assets

91,276

92,890

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

1,942

3,276

Sales reserves and allowances

7,500

7,839

Trade payables

2,378

2,157

Employee-related obligations

660

859

Accrued expenses

2,500

3,405

Other current liabilities

923

867

Liabilities held for sale

-

116

Total current liabilities

15,903

18,519

Long-term liabilities:

Deferred income taxes

5,291

5,215

Other taxes and long-term liabilities

1,643

1,639

Senior notes and loans

32,694

32,524

Total long-term liabilities

39,628

39,378

Equity:

Teva shareholders’ equity

34,023

33,337

Non-controlling interests

1,722

1,656

Total equity

35,745

34,993

Total liabilities and equity

91,276

92,890

Condensed Consolidated Cash Flow

(Unaudited, U.S. Dollars in millions)

Three months ended

March 31,

2017

2016

Operating activities:

Net income

641

633

Net change in operating assets and liabilities

(463)

189

Items not involving cash flow

292

554

Net cash provided by operating activities

470

1,376

Net cash provided by (used in) investing activities

1,182

(2,417)

Net cash provided by (used in) financing activities

(1,768)

267

Translation adjustment on cash and cash equivalents

28

(208)

Net change in cash and cash equivalents

(88)

(982)

Balance of cash and cash equivalents at beginning of period

988

6,946

Balance of cash and cash equivalents at end of period

900

5,964

Non GAAP reconciliation items

(Unaudited, U.S. Dollars in millions)

Three Months Ended

March 31,

2017

2016

U.S. $ in millions

Amortization of purchased intangible assets

320

189

Restructuring expenses

130

19

Inventory step-up

64

6

Capital loss from currency translation

52

-

Equity compensation expenses

36

24

Costs related to regulatory actions taken in facilities

34

38

Acquisition, integration and related expenses

23

47

Contingent consideration

21

51

Legal settlements and loss contingencies

20

(25)

Impairment of long-lived assets

11

13

Other non-GAAP items

15

2

Financial expense (income)

(28)

246

Minority interest

(13)

-

Corresponding tax benefit

(186)

(74)

Reconciliation between net income
attributable to ordinary shareholders and earnings per share

as reported under US GAAP to non-GAAP net
income attributable to ordinary shareholders and earnings per share

Dividends on the mandatory convertible preferred shares of $66
million for the three months ended March 31, 2016 are added back to
non-GAAP net income attributable to ordinary shareholders, since
such preferred shares had a dilutive effect on non-GAAP earnings per
share.

(5)

The non-GAAP weighted average number of shares was 1,017 and 979
million for the three months ended March 31, 2017 and 2016,
respectively. The non-GAAP weighted average number of shares for the
three months ended March 31, 2017 does not take into account the
potential dilution of the mandatory convertible preferred shares
(amounting to 59 million weighted average shares), which have anti
dilutive effect on non-GAAP earnings per share. Non-GAAP earnings
per share can be reconciled with GAAP earnings per share by dividing
each of the amounts included in footnotes 1-4 above by the
applicable weighted average share number.

Segment Information

Generics

Three months ended March 31,

Percentage Change

2017

2016

2017 - 2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

3,058

100%

$

2,458

100.0%

24%

Gross Profit

1,370

44.8%

1,123

45.7%

22%

R&D Expenses

191

6.2%

129

5.3%

48%

S&M Expenses

400

13.1%

345

14.0%

16%

Segment Profit*

$

779

25.5%

$

649

26.4%

20%

Specialty

Three months ended March 31,

Percentage Change

2017

2016

2017 - 2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

2,020

100%

$

2,152

100.0%

(6%)

Gross Profit

1,754

86.8%

1,871

86.9%

(6%)

R&D Expenses

255

12.6%

239

11.1%

7%

S&M Expenses

461

22.8%

457

21.2%

1%

Segment Profit*

$

1,038

51.4%

$

1,175

54.6%

(12%)

* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.
Beginning in the fourth quarter of 2016, our OTC business is
included in our generics medicines segment. The data presented have
been conformed to reflect these changes for all relevant periods.

Additional information

Multiple Sclerosis

Three months ended March 31,

Percentage Change

2017

2016

2017 - 2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

970

100.0%

$

1,006

100.0%

(4%)

Gross profit

888

91.5%

919

91.4%

(3%)

R&D expenses

22

2.3%

25

2.5%

(12%)

S&M expenses

124

12.7%

89

8.9%

39%

Segment profitability

$

742

76.5%

$

805

80.0%

(8%)

Other Specialty

Three months ended March 31,

Percentage Change

2017

2016

2017 - 2016

U.S.$ in millions / % of Segment Revenues

Revenues

$

1,050

100.0%

$

1,146

100.0%

(8%)

Gross profit

866

82.5%

952

83.1%

(9%)

R&D expenses

233

22.2%

214

18.7%

9%

S&M expenses

337

32.1%

368

32.1%

(8%)

Segment profitability

$

296

28.2%

$

370

32.3%

(20%)

Reconciliation of our segment profit

to consolidated income before income taxes

Three months ended

March 31,

2017

2016

U.S.$ in millions

Generic medicines profit

$

779

$

649

Specialty medicines profit

1,038

1,175

Total segment profit

1,817

1,824

Profit (loss) of other activities

26

(4

)

1,843

1,820

Amounts not allocated to segments:

Amortization

320

189

General and administrative expenses

236

304

Impairments, restructuring and others

240

119

Inventory step-up

64

6

Costs related to regulatory actions taken in facilities

34

38

Legal settlements and loss contingencies

20

(25

)

Other unallocated amounts

34

24

Consolidated operating income

895

1,165

Financial expenses - net

207

298

Consolidated income before income taxes

$

688

$

867

Revenues by Activity and Geographical Area

(Unaudited)

Three Months EndedMarch 31,

PercentageChange

PercentageChange

2017

2016

2017 - 2016

2017 - 2016

U.S. $ in millions

in localcurrencies

Generic Medicines

United States

$

1,381

$

976

41%

41%

Europe*

988

790

25%

31%

Rest of the World

689

692

§

27%

Total Generic Medicines

3,058

2,458

24%

34%

Specialty Medicines

United States

1,492

1,677

(11%)

(11%)

Europe*

438

394

11%

17%

Rest of the World

90

81

11%

9%

Total Specialty Medicines

2,020

2,152

(6%)

(5%)

Other Revenues

United States

320

4

7900%

7900%

Europe*

78

51

53%

59%

Rest of the World

154

145

6%

2%

Total Other Revenues

552

200

176%

175%

Total Revenues

$

5,630

$

4,810

17%

22%

* We define our European region as the European Union and certain
other European countries.

§ Less than 0.5%.

Revenues by Product line

(Unaudited)

Three Months EndedMarch 31,

PercentageChange

2017

2016

2017 - 2016

U.S. $ in millions

Generic Medicines

$

3,058

$

2,458

24%

OTC

264

292

(10%)

API

197

197

0%

Specialty Medicines

2,020

2,152

(6%)

CNS

1,138

1,323

(14%)

Copaxone®

970

1,006

(4%)

Azilect®

60

113

(47%)

Nuvigil®

17

103

(83%)

Respiratory

304

366

(17%)

ProAir®

121

173

(30%)

QVAR®

98

134

(27%)

Oncology

270

268

1%

Treanda® and Bendeka®

157

155

1%

Women's Health

124

110

13%

Other Specialty*

184

85

116%

All Others

552

200

176%

Total

$

5,630

$

4,810

17%

* Includes a $75 million payment related to the Ninlaro®
transaction in the first quarter of 2017.